The economic outlook is cloudy but there is a silver lining.
Amid uncertainty, you can seek out resilient businesses that demonstrate a great track record of paying out steady dividends.
This passive income flow can sustain you through a downturn and keep your portfolio safe while waiting for the inevitable recovery.
Here are four such stocks with dividend yields exceeding four per cent.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics (Holdings) Ltd, or MMH, designs and manufactures high-precision tools and parts for clients in the wafer fabrication and assembly processes of the semiconductor industry.
The group has reported a steady set of earnings for its fiscal year ending 30 June 2022 (FY2022).
Revenue rose 11.8% year on year to S$82.5 million while operating profit increased 12.6% year on year to S$26.2 million.
Net profit was up 9.7% year on year to S$19.8 million.
A final dividend of S$0.06 and a special dividend of S$0.02 were declared, taking the FY2022 dividend to S$0.14 per share.
MMH’s shares offer a historical dividend yield of 4.5%.
The World Semiconductor Trade Statistics (WSTS) expects the global semiconductor industry to continue doing well, with chip sales growing 16.3% year on year to US$646 billion.
By 2023, WSTS is projecting that the semiconductor market will grow a further 5.1%.
MMH can ride this trend to report a steady increase in sales and profits for this year and the next.
VICOM Limited (SGX: WJP)
VICOM is a provider of test and inspection services for vehicles as well as in fields such as mechanical, biochemical, and civil engineering.
The group reported an upbeat set of earnings for its fiscal 2022’s first half (1H2022).
Revenue increased to S$53.3 million, up 8.5% year on year from S$49.2 million in 1H2021.
Operating profit rose 10.6% year on year while net profit improved by 9.2% year on year to S$13.1 million.
In line with the good results, VICOM declared an interim dividend of S$0.0332, 9.2% higher than the S$0.0304 paid out a year ago.
Together with the inspection company’s final and special dividends for FY2021 amounting to S$0.0524, the trailing 12-month dividend stands at S$0.0856.
VICOM’s shares offer a trailing 12-month dividend yield of 4.2%.
The group sees better prospects for its non-vehicle testing segment but warned of higher costs from supply chain disruptions and an increase in energy prices.
OCBC Ltd (SGX: O39)
OCBC is one of Singapore’s three big local banks.
The lender had not only successfully navigated its way through the pandemic but also recently posted a record net profit for 1H2022.
The bank also upped its interim dividend to S$0.28 from S$0.25 last year, bringing the trailing 12-month dividend to S$0.56.
OCBC’s shares offer a trailing 12-month dividend yield of 4.6%.
Looking ahead, the bank is poised to reap the benefits of higher interest rates that will flow through to increase its net interest margin and net interest income.
CEO Helen Wong remains positive for the remainder of this year and projects a mid-single-digit year on year growth in OCBC’s loan book.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology, defence and engineering group with businesses in the aerospace, smart city, and public security sectors.
The group serves customers in more than 100 countries.
The stalwart reported a respectable set of earnings for 1H2022, with revenue rising 17% year on year to S$4.3 billion.
Operating profit increased 8% year on year to S$384.6 million.
Net profit would have risen 4% year on year if the effects of the government’s job support scheme and one-off expenses from STE’s TransCore acquisition were excluded.
A second interim quarterly dividend of S$0.04 was declared, taking annualised FY2022 dividend to S$0.16 per share.
STE’s annualised forward dividend yield stands at 4.2%.
The engineering conglomerate had secured S$3.1 billion of new contracts in 2Q2022, taking its order book to S$22.2 billion as of 30 June 2022.
The TransCore acquisition will boost STE’s smart city ambitions and the group continues to enjoy healthy contract win momentum.
In our special FREE report, Top 9 Dividend Stocks for 2022 – and 3 Tactical Shifts to Maximise Your Profits, we’re revealing 3 special categories of stocks that are poised to deliver maximum growth in 2022 and beyond.
Our safe-harbour stocks are a set of blue-chip companies that have been able to hold their own and deliver steady dividends. Growth accelerators stocks are enterprising businesses poised to continue their growth. And finally, the pandemic surprises are the unexpected winners of the pandemic.
Download for free to find out which are our safe-harbour stocks, growth accelerators, and pandemic winners! CLICK HERE to find out now!
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclaimer: Royston Yang owns shares of VICOM and Micro-Mechanics (Holdings).